Report: Australia's second-hand property profit rate reaches 14-year high, Adelaide and Brisbane outperform the national average

Thanks to rising property prices and high mortgage rates, the profit margin on Australian property resales reached its highest level since July 2010 in the first quarter of 2024. According to CoreLogic's Pain and Gain report for the first quarter of 2024, 94.31% of the approximately 85,000 resales recorded a profit.

CoreLogic head of research Eliza Owen said the number of transactions was up 851% year-on-year, with national house prices rising 171% over the quarter. While the median gross profit fell to $265,000, this was partly due to a higher proportion of resales at the start of the year.

"Despite a slight decline in median book gains, seller profitability improved over the year to reach its highest level for Australian residential sales since July 2010," she said.

While the proportion of profitable sales increased, the total profit value fell to A$28.6 billion from A$30.6 billion in the previous quarter due to seasonal sales reductions. The paper loss fell to A$278 million from A$302 million in the previous quarter.

Among the capital cities, Melbourne had the highest loss-making percentage, at 9.21 per 3T. Adelaide and Brisbane were the most profitable cities, with a loss-making percentage of just 1.61 per 3T. Perth showed significant improvement, with the loss-making percentage falling from 43.81 per 3T in June 2020 to 6.41 per 3T. The decline in the loss-making percentage of short-term resales indicates that households are responding to interest rate cuts.

Nationally, houses have a higher rate of profitable sales than units. The median nominal gain on resale for houses is $320,000, compared to $172,500 for units. The longer the holding period, the higher the resale gain. The national median holding period for resales is 8.8 years, down from 9 years in the previous quarter.

Key findings from the first quarter include: